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Equity instruments that are held for trading are required to be classified at FVTPL. For all other investment in equity instruments and entity can irrevocably

Equity instruments that are held for trading are required to be classified at FVTPL. For all other investment in equity instruments and entity can irrevocably elect on initial recognition, on an

instrument by instrument basis, to present changes in fair value in OCI rather than profit or loss.

This is under:

a.

Both US GAAP and IFRS

b.

Neither US GAAP nor IFRS

c.

US GAAP only

d.

IFRS only

2.

Equityinvestmentsare generally required to be measured at fair value with changes

infair value recognized in earnings. This is under:

a.

Both US GAAP and IFRS

b.

US GAAP only

c.

Neither US GAAP nor IFRS

d.

IFRS only

3..

From the standpoint of accounting theory, which of the following statements is the best

justification for the preparation of consolidated financial statements?

a.

In substance and form the companies are one entity

b.

In substance and form the companies are separate entities

c.

In substance the companies are separate, but in form the companies are one entity

d.

In substance the companies are one entity, but in form they are separate

4..

A parent company regularly sells merchandise to its 70%-owned subsidiary.

Which of the following statements describes the computation of noncontrolling interest share?

a.

(The subsidiary's net income + unrealized profits in the beginning inventory - unrealized profits in the ending inventory) 30%

b.

The subsidiary's net income + unrealized profits in the ending inventory - unrealized profits in the beginning inventory) 30%

c.

The subsidiary's net income times 30%

d.

(The subsidiary's net income 30%) + unrealized profits in the beginning inventory - unrealized profits in the ending inventory

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